Ahead of the Curve provides you with analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity and FOREX markets are discussed.

About

Ahead of the Curve provides you with analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity and FOREX markets are discussed. Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Friday, 1 December 2017

Mutual funds are very good investment avenues for the
average investor. There is a popular belief that mutual funds are terrific
investment vehicles because they potentially diversify risk away. A look at
some of the best mutual funds in the recent past paints a rather interesting
picture:

What is interesting in the above chart is that the returns above closely track each
other. Funds that take high risk deliver higher returns while funds that take
lower risk deliver lower returns. Thus it appears that none of the funds are
consistently generating excess returns relative to the risk they are taking.

So how do we solve this problem? Why not consider an
optimized portfolio of stocks that can produce significantly superior returns
for a given level of risk? Enter the portfolio
optimizer tool from Spotalpha. Set
your maximum risk profile (say -10%). Identify stocks and keep optimizing till
you find a portfolio that provides maximum performance within identified risk
profile. Allocate to these stocks and comeback every 15 days or so to check if
there are any new re-balancing suggestions to the allocation. You are now on
the path to superior returns.

An optimized portfolio of stocks like this
one delivered +154% return at a lower draw down risk
of -5%, when compared to the best mutual fund which delivered +28%
return for a draw down risk of -10% on an annual basis:

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

China’s central bank, the PBOC, said it would increase the yuan’s trading day by seven hours, opening the currency to more foreign investors and narrowing the gap between the onshore and offshore foreign-exchange markets.

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Refurbished MacBooks

My Asset Allocation Strategy (Indian Market)

My belief is that stocks are relatively overvalued compared to bonds and attractive buying opportunities can come along after 1-2 years. In a deflationary scenario no asset class does well other than U.S bonds, the U.S dollar and the Japanese yen, so better to be safe than sorry with high quality government bonds and fixed deposits. Cash is the king always. Of course this varies with the person's age.